US jobless claims rise to near three-month high

The number of Americans filing for unemployment benefits rose to near a three-month high last week, but remained below a level associated with a strong labour market.

Initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 265,000 for the week ended October 29th, the highest level since early August, the labor department said on Thursday. Claims for the prior week were unrevised.

It was the 87th consecutive week that claims remained below 300,000, a threshold associated with a healthy labour market. That is the longest stretch since 1970, when the market was much smaller.

Economists polled by Reuters had forecast first-time applications for jobless benefits would be unchanged at 258,000 in the latest week.

The Federal Reserve on Wednesday left interest rates steady, but said its monetary policy-setting committee "judges that the case for an increase in the federal funds rate has continued to strengthen".

The US central bank is widely expected to increase its overnight benchmark interest rate in December, but the decision could depend on the outcome of the November 8th presidential election.

The tightening of the race between Democratic candidate Hillary Clinton and Republican rival Donald Trump has rattled financial markets. The Fed raised borrowing costs last December for the first time in nearly a decade.

On Wednesday, the central bank offered a fairly upbeat assessment of the labour market, inflation and the broader economy.

No special factors

A labor department analyst said there were no special factors influencing last week’s data and that no states had been estimated. There was a surge last week in the unadjusted claims for Kentucky, California and Missouri.

The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, increased 4,750 to 257,750 last week.

The report has no bearing on October’s employment report, which is scheduled for release on Friday, as it falls outside the survey period.

According to a Reuters survey of economists, non-farm payrolls likely increased 175,000 last month after rising 151,000 in September.

The unemployment rate is seen to have slipped one-tenth of a percentage point to 4.9 per cent.

Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid declined 14,000 to 2.03 million in the week ended October 22nd, the lowest reading since June 2000.

The four-week average of the so-called continuing claims fell 9,000 to 2.04 million. That was the lowest level since July 2000.

– (Reuters)